Well, if i remember correctly, you can only turn off the codes within the gameshark menu. Once you start up a game you can't disable that said code. The Gameshark, is a hacking device (a good one at that too, im guilty of using it on a few shooting games myself.) certain codes can disrupt the game due to them not being in the original coding of the game.

The Sephiroth cheat, will crash your game if you enter a group conversation with dialogue between your party members. Sephiroth doesn't have a in-party dialogue, since...well he's a bad guy, who is only in the Nibelhiem flashbacks, (even then he's computer controlled) so having him in your party will only hinder your progress, (just like adding Aeris back in through a hacking device, after she kicks the bucket.).

So really, you can't leave the cheat on if you hope to play through the game, so you'll most likely have to leave it off when you start the game shark back up.

Hope I was helpful.

Later
Ansem

My talent's for lying. For sticking the knife in when people least expect it. Then walking away with a smile and a wave before they even realise they're bleeding.